1. Field of the Invention
The present invention relates to financial transaction systems. More particularly, the present invention relates to a reimbursement process and processor for conducting financial transactions.
2. Background Information
Currently most holders of pretax flexible savings accounts (FSAs), such as, for example, health reimbursement arrangements (HRAs), health savings accounts (HSAs), medical spending accounts (MSAs) or other FSAs (collectively, “restricted use flex accounts”), use the restricted funds for health, dental, vision and pharmacy insurance co-payments and deductibles. New regulations enable the purchase of Over-the-Counter (OTC) medications, which are available at many vendors without sufficient automated means for presenting transaction data to account administrators charged with substantiating such restricted use flex accounts. Additionally, banks are aggressively issuing restricted use flex account debit cards without an ability to adequately automate administration of purchase restrictions at the line item level. Thus, cardholders are required to make decisions relating to allowable purchases at the point and time of sale. Additionally, cardholders must separate their purchases into multiple distinct groups of items and multiple payment tenders (restricted use debit card and cash or other general purpose payment method) for allowable (i.e., reimbursable) and unallowable (non-reimbursable) items, costing the cardholder both time and convenience. In addition, the cardholder may mistakenly or unknowingly group an unallowable item(s) with allowable ones, thus inadvertently using restricted funds for an unallowable purchase(s).
Rebate or promotional account systems are also known. In the rebate/promotional account based system, a user first registers a credit or debit card with a third party promotional account system provider (the “third party provider”). When the user makes a purchase of a promotional or special item from merchants/vendors that participate in the rebate/promotional account system, a certain percentage of that purchase will be transferred (the percentage amount or rebate) from the merchant/vendor to the third party provider. The third party provider deposits the percentage amount into a special account that is associated with the user. The value of the percentage amount is governed by agreements between the merchants/vendors and the third party provider (typically, in the order of 1-3%). Only the purchase of promotional or special items that are being pushed by the merchant/vendor or manufacturer will trigger the transfer of the percentage amount from the merchant/vendor to the third party provider. From time-to-time, the merchant/vendor or manufacturer and/or the third party provider can advertise that the purchase of certain really special items will trigger an additional amount or rebate to be transferred to the special account associated with the user. The special account is not administered by the third party provider; it typically is a user's credit or debit card account, a qualified education savings account or a registered non-profit organization. Qualified education savings accounts can be a “529” education savings account.
The essence of the rebate/promotional account based system is that it is not the user's funds (or the user's employer's funds) that are transferred to the special account, but the merchant/vendor's or manufacturer's funds. The rebate/promotional account based system is well known to those of ordinary skill in the art. An example of such a rebate/promotional account based system is UPromise®. This type of rebate/promotional account based system is not part of the embodiments of the present invention and is, therefore, excluded therefrom. Stated another way, allowable purchases in the context of restricted use flex accounts should not be equated with purchases made under the rebate/promotional account based or like systems described above.
Therefore, there is a need for a system and method for automatically collecting data that can be used to substantiate transactions associated with restricted use flex accounts and to facilitate reimbursements for such accounts.